---
title: O.C.G.A. § 11-9-205. Use or disposition of collateral permissible.
collection: code
id: 11-9-205
cite_as: O.C.G.A. § 11-9-205 (2025)
canonical_url: https://georgiacommons.org/code/11-9-205
md_url: https://georgiacommons.org/code/11-9-205.md
text_url: https://georgiacommons.org/code/11-9-205/text
source_url: https://www.legis.ga.gov/api/document/docs/default-source/joint-features-document-library/t11-(v9)-2022-pdf.pdf?sfvrsn=b5451bbd_0#page=765
date: 2025
status: active
corpus_version: 2025-supplement-89aa39ab3c68
license: CC0-1.0
publisher: Georgia Commons, an independent project of Georgia Civic Data. Not the State of Georgia. Not legal advice.
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version: the only printed version
in_force: true
current_through: Including Acts of the 2025 Regular Session of the General Assembly
heading_path: COMMERCIAL CODE / SECURED TRANSACTIONS / EFFECTIVENESS OF SECURITY AGREEMENT; ATTACHMENT OF SECURITY INTEREST; RIGHTS OF PARTIES TO SECURITY AGREEMENT / Effectiveness and Attachment
---

# O.C.G.A. § 11-9-205. Use or disposition of collateral permissible.

(a) When security interest not invalid or fraudulent. A security interest is not invalid or fraudulent against creditors solely because:

(1) The debtor has the right or ability to:

(A) Use, commingle, or dispose of all or part of the collateral, including returned or repossessed goods;

(B) Collect, compromise, enforce, or otherwise deal with collateral;

(C) Accept the return of collateral or make repossessions; or

(D) Use, commingle, or dispose of proceeds; or

(2) The secured party fails to require the debtor to account for proceeds or replace collateral.

(b) Requirements of possession not relaxed. This Code section does not relax the requirements of possession if attachment, perfection, or enforcement of a security interest depends upon possession of the collateral by the secured party.

## History

Code 1981, § 11-9-205, enacted by Ga. L. 2001, p. 362, § 1.

## Law Reviews

For article discussing the classification of a continuing security interest in changing collateral as an unenforceable preference under Section 60a of the Bankruptcy Act, see 1 Ga. L. Rev. 257 (1967).

For note examining the conflict between the floating lien in after-acquired property under the Uniform Commercial Code and the voidable preferences provisions of the Bankruptcy Act, see 9 Ga. L. Rev. 685 (1975).

For article, “The Good Faith Purchase Idea and the Uniform Commercial Code,” see 15 Ga. L. Rev. 605 (1981).